The Special Joint Committee on Revenue Structure met to discuss possible changes to Georgia’s tax laws in response to the report published earlier this year by the Special Council on Tax Reform. Currently, there are four House Bills, HB 385-388, that contain the recommendations of the council, and these have caused some confusion and consternation as of late. The fact of the matter is that these bills and the recommendations in them were required to be introduced by the resolution establishing the council, and may not necessarily reflect the preferences and priorities of the legislature.
Two of the goals discussed at Thursday’s meeting were broadening the sales tax base and reducing the income tax burden. In response to feedback from taxpayers, the committee expressed a desire to avoid taxing groceries, prescription medicines, veterinary care, hair care, AAA and other memberships, and Girl Scout cookies. The main feature of the proposal, though, is a reduction in the state personal income tax from the current 6 percent to 4.5 percent or lower. The Senior Income Tax exemption of $35,000 ($70,000 for married couples) will remain intact; as will deductions for college savings plan contributions and social security.
However, increases voted in last year might not be included.
The proposal offered by the committee also seeks to boost Georgia’s manufacturing sector by eliminating the sales tax on energy used in the manufacturing process. Currently, there are only 14 U.S. states that tax this use of energy, and only one other in the Southeast (North Carolina).
In keeping with the revenue neutral goal of the tax proposal, the committee is contemplating a number of consumption-based taxes to make up for revenue lost by reducing the income tax. Among these are taxes on casual (person to person, except for immediate family) sales of automobiles, boats, and planes, sales tax on auto repair service, and standardization of communications services taxes across all mediums (cable, satellite, and telephone—including cell phone service).
The proposal also removes a telecom tax on capital investment— a measure designed to encourage the construction of communications infrastructure and encourage the promulgation of wireless and broadband services to rural areas.
Even with these changes, the legislation is still a work in progress, and will likely continue to evolve over the next few weeks with input from voters and legislators.
Passed House—Now in Senate
HB 47: Allows insurers to offer individual accident and sickness insurance policies in Georgia that have been approved for issuance in other states.
HB 91: Requires indication of any felony conviction on drivers’ licenses.
HB 110: Allows local governments to require registration of vacant real property.
HB 147: Requires a physician to disclose upon request whether he or she carries medical malpractice insurance.
HB 277: Allows hunting deer over bait.
HB 292: Delays an automatic increase in the employer contribution rate for the Unemployment Compensation Fund. The rate currently stands at 2.62 percent, and would otherwise increase to 2.7 percent on Jan. 1, 2012. HB 292 also extends the suspension of the Reserve Ratio Surcharge for an extra year, or through December, 2012
HB 314: Counts a foster child as present at school while he or she is attending foster care related court proceedings.
Bills passed
HB 223: Exempts poultry farm buildings from state minimum building code standards.
If you would like additional information regarding a specific piece of legislation, you may access the Georgia General Assembly Web site at www.legis.ga.gov/
I may be reached at
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E-mail at Jack.Hill@senate.ga.gov
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